Alibaba
Alibaba

A disappointing quarterly report coming on top of allegations of illegal business activity pushed shares of Chinese internet giant Alibaba down about 6 per cent Thursday.

alibaba
alibaba

Although the company reported a 40-per-cent year-on-year jump in revenues, to 4.2 billion dollars, net income for the fourth quarter flagged to 5.98 billion yuan (964 million dollars), a 28-per-cent decline from the 8.36 billion yuan it took in during the same quarter in 2013.

It was the company’s second earnings report since its initial public offering in September.

The company attributed its increase in revenues to rapid growth in its domestic commerce retail business.

Nonetheless, the drop in income was taken badly by markets, which pushed the value of Alibaba shares down to 92.70 dollars in premarket trading.

The company said gross merchandise volume across China’s retail marketplaces grew 49 per cent year on year, and that the number of annual active buyers increased to 334 million in 2014, an increase of 45 per cent year on year.

Alibaba, a collection of businesses that concentrate on online shopping and bringing businesses together, broke the US record for the most capital raised in an initial public offering in September – 25.03 billion dollars.

Their fourth quarter earnings report was overshadowed by the release of a scathing government criticism on Wednesday accusing the company of not doing enough to stop “illegal business” from appearing on its e-commerce platforms.

Alibaba Group’s Executive Vice Chairman Joe Tsai said during a Thursday earnings conference call that the company was “deeply troubled” by the allegations.

Tsai denied asking the regulator to withhold the report and said it had cooperated with Chinese law enforcement agencies in more than 1,000 counterfeiting cases last year.

“In the global e-commerce marketplace, there will always be people who seek to conduct illicit activities, and like all global companies in our industry, we must continue to do everything we can to stop these activities,” Tsai said.
GNA

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